HC Deb 31 March 1981 vol 2 cc142-3
10. Mr. Rooker

asked the Secretary of State for Social Services if he can now make a statement on the future system of child benefit payments.

20. Mr. Andrew F. Bennett

asked the Secretary of State for Social Services when he now expects to announce his decision upon the arrangements for paying child benefit weekly or monthly.

Mr. Patrick Jenkin

I am still considering the comments received on the Government's proposals in Cmnd. 8106, and I hope to announce the Government's decision on all the proposals shortly after the Easter Recess.

Mr. Rooker

Will the Secretary of State confirm that it will no longer be possible to make a statement before Easter? Will there be a gap between any Government decision to change the system and the introduction of that change? If the Government go ahead with the four-week proposal, will he assure the House and the mothers of this country that the £50 million saved by the cash flow effects on his Department will be put to increased child benefits?

Mr. Jenkin

At this stage I do not want to commit myself to a precise time, because clearly that would depend on what changes, if any, we propose. Any effect on total public expenditure occasioned by less frequent payments of child benefit—the hon. Gentleman rightly used the term "cash flow"—will affect the cash flow in moving expenditure from this year to next. The resulting reduction in public expenditure this year is a reduction which the Chancellor must have if he is to meet his Budget targets.

Mr. Bennett

Does not the Secretary of State accept that the most important people to consult are the mothers who draw the benefit? Would it not be better to guarantee that any mother who wanted to draw her benefit weekly could continue to do so, even if the Government wished to persuade some people to change to a monthly system?

Mr. Jenkin

We have received representations about the White Paper from 550 individuals, organisations and local authorities, many of them representing mothers and particularly mothers in need. I am of course aware that strong views have been expressed to the effect that weekly payment of child benefit should be retained for those who want it. I assure the hon. Gentleman that I am taking those representations seriously, and we hope to announce our decision after Easter.

Mr. Peter Bottomley

Does my right hon. Friend agree that the level of child benefit is the most important factor? Does he accept that, although the increase was good, we expect even more? If the survey shows that the majority of mothers wish to draw child benefit four-weekly, does he accept that allowing for the choice will probably achieve most of what the Government are after?

Mr. Jenkin

I am grateful for my hon. Friend's initial remarks. The Opposition's wish to have it both ways is puzzling. They must decide whether the amount of child benefit is reasonable and should be received regularly or is insignificant, in which case why should it not be paid less frequently? The Government are considering my hon. Friend's second point.

Mr. Freeson

Does the Secretary of State accept that, despite the recent increases, child benefit is 40 per cent. a week lower in real terms than when his Government came to office? Should not his most urgent priority be to bring it back to that level?

Mr. Jenkin

I cannot confirm the right hon. Gentleman's figures. The increase announced in the Budget will maintain child benefit at last November's level, in accordance with the undertaking that I gave to the House.

Mr. Ralph Howell

Does my right hon. Friend agree that child benefit is more valuable to people on higher rather than lower incomes because it is tax-free? Has he considered making it taxable? If it was, what would the yield be?

Mr. Jenkin

Child benefit replaced child tax allowances, which had the same impact.

Mr. Peter Bottomley

More so.

Mr. Jenkin

Indeed. Child benefit is in a sense a child tax credit and is a tax-free sum paid to mothers, whatever their income. I have doubts about any recommendation to make the benefit means-tested. It would be strange to bring a benefit that has replaced tax allowances into taxation.